Acme manufacturing company of portland oregon has a

Reference no: EM13376129

Acme Manufacturing Company of Portland, Oregon has a Research & Development department that currently provides services to in-house manufacturing departments.

Other manufacuturers have expressed interested in using Acme's R&D department for special projects. Management has decided to conduct an activity-based costing system in order to determine charges for both outside and in-house users of the department's services.

R&D activities fall into four pools with the following annual costs:

	Market Analysis	1,050,000
	Product Design	2,350,000
	Product Development	3,600,000
	Prototype Testing	1,400,000

Activity analysis determines that the appropriate cost drivers and their usage for the four activities are:

	Activities	Cost Drivers	Total Estimated Drivers

	Market Analysis	Hours of analysis	1500 hours
	Product Design	Number of designs	2500 designs
	Product Development	Number of products	90 products
	Prototype Testing	Number of tests	500 tests

a) Compute the activity-based overhead rate for each pool. Use appropriate excel formulas to show your work

Market Analysis
Product Design
Product Development
Prototype Testing

b) How much cost would be charged to an in-house manufacturing department that consumed 1,800 hours of market analysis time, was provided 280 designs relating to 10 products and requested 92 engineering tests?

Market Analysis
Product Design
Product Development
Prototype Testing
Total

c) How much cost would serve as the basis for for pricing an R&D bid with an outside company on a contract that would consume 800 hours of analysis time, require 178 designs relating to 3 products, and result in 70 engineering tests?

Market Analysis
Product Design
Product Development
Prototype Testing
Total

d) What is the benefit to Acme Manufacturing of applying activity-based costing to its R&D activity for both in-house and outside charging purposes?

Reference no: EM13376129

Questions Cloud

Case study question 1read headline health rates as top : case study question 1read headline health rates as top social issue. would you expect management to worry about

Straightforward computation of overhead variancesthe : straightforward computation of overhead variancesthe following data are the actual results for marvelous marshmallow

Centcom inccentcom inc a telephone company entered into an : centcom inc.centcom inc. a telephone company entered into an agreement to manage britel a telecommunications company

Assignment detailsyou are the financial accountant for a : assignment detailsyou are the financial accountant for a mid-sized company and you have been briefed on a meeting that

Acme manufacturing company of portland oregon has a : acme manufacturing company of portland oregon has a research amp development department that currently provides

Topic a number of corporate failures took place in : topic a number of corporate failures took place in australia and united states between 2000 and 2002 causing major

Topic 1 ethics and budgetingbudgeting is generally regarded : topic 1 ethics and budgetingbudgeting is generally regarded as an essential technique for planning and controlling an

1 the globalization of business activity has resulted in : 1. the globalization of business activity has resulted in which of the following?a.nbsp increased corruption and

Betty whose tax rate is 33 is in the business of breeding : betty whose tax rate is 33 is in the business of breeding and racing horses. except for the transactions below she has

User Account

All Pages